Fresh US Fed Reserve stimulus boosts $A

Fresh stimulus measures from the US Federal Reserve have pushed the Australian dollar slightly higher.

At 12.00pm AEDT on Thursday, the Australian dollar was trading at 105.43 US cents, up from 105.32 cents on Wednesday.

The currency rose to a three-month high of 105.87 cents overnight after the Fed's announcement of further stimulus measures, which include keeping short term interest rates near zero until the unemployment rate of 7.7 per cent falls to 6.5 per cent.

Easy Forex currency dealer Anthony Botros said the market had rallied over the past few days in anticipation of the announcement.

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On Thursday morning (Australian time) the Fed announced it would continue buying long term bonds following the expiration of its `Operation Twist' debt purchasing program.

Mr Botros said uncertainty about the so called US fiscal cliff - a series of tax hikes and spending cuts that are likely to send the US back into recession - had prevented the Australian dollar rallying further overnight.

"The on-going risk or fear of fiscal cliff did cap any further advancements on the Aussie overall overnight," he said.

The Australian dollar would pause around the 1.05 cent level throughout trading on Thursday, he said.

At 12.00pm AEDT on Thursday, the December 10-year bond futures contract was at 96.825 (implying a yield of 3.175 per cent), down from 96.855 (implying a yield of 3.145 per cent) on Wednesday.

The December three-year bond futures contract was trading at 97.285 (2.715 per cent), down from 97.320 (2.680 per cent).